Most investors spend their time watching the S&P 500. That’s a mistake, because the credit market is the real “tell.” The bond market has been whispering a warning for weeks now, and credit spreads are now shouting it. As of this writing, the CDX Index, a benchmark measure of credit default swap spreads, has climbed to a nine-month high while the S&P 500 sits within 5% of its all-time peak. Over the past 20 years, every time that combination appeared, a bear market followed. Every single time.

The chart from Sentiment Trader below tells the story as clearly as any amount of prose could. The top panel tracks the S&P 500 since 2007. The middle panel shows the CDX Index of credit default swaps. The bottom panel shows where those spreads stand relative to their 189-bar range, essentially a percentile reading of how elevated they are relative to recent history. (Red markers indicate instances where CDX spreads hit 9-month highs while the S&P 500 is within 5% of its high.)

https://www.zerohedge.com/markets/what-do-bonds-know-stock-market-doesnt